PERTINENT HISTORY: Previous policy was based on a literal statutory
interpretation in determining dependency for illegitimate children who can
inherit property from their insured father or mother.

Section 202(d)(3) of the Act provides that legitimate children, children
of a deemed marriage, and illegitimate children who have been either
acknowledged in writing by the father, or for whom there was a court order
of paternity or support, are deemed dependent upon the father. All other
children of the wage earner must establish dependency by showing that they
were either "living with" or "receiving contributions from" the wage
earner at the time specified in the law. Thus, a child under section
216(h)(2)(A) of the Act, that is, a child who can inherit from the worker
under State law, was required to establish dependency.

Although previous policy required a child who can inherit from the wage
earner to establish dependency, in many States the same action by the
parent which gives a child the right to inherit, such as a written
acknowledgment, may also be used to establish the child's entitlement (and
deemed dependency) under section 216(h)(3) of the Act.

The Supreme Court, in Jimenez v. Weinberger, 417 U.S. 628 (1974),
stated, by way of dictum, that an illegitimate child who may inherit under
State law is deemed dependent upon his or her father. Because this
statement is contrary to the literal statutory language, SSA's position
that such children are not deemed dependent was argued to the Supreme
Court in later litigation.

After full briefing, the Supreme Court, in Mathews vs. Lucas, 427
U.S. 495 (1976), declined to accept SSA's position, and stated its view
that the child who may inherit under State law is dependent and need not
prove dependency. SSA accepted this statement as establishing the law of
the matter.

POLICY STATEMENT: A claimant for child's benefits, who qualifies as
a child because he or she can inherit intestate personal property under
the law of the State of the wage earner's domicile, is deemed dependent
upon the wage earner. Proof that the child was living with, or receiving
contributions from, the wage earner is not required.

EFFECTIVE DATE: This policy represents a change in position from
policy previously followed. This new policy is required by the court
decision, Mathews vs. Lucas, and is effective June 29, 1976, the
date of that decision.

Any claim adjudicated on or after that date which did not conform to the
revised policy and which resulted in an unfavorable decision, may be
reopened to conform to the revised policy.